On July 7, 2020, the Office of Foreign Assets Control (OFAC) announced that Seattle-based e-commerce retailer Amazon would pay a $134,523 penalty for alleged violations of multiple OFAC sanctions programs and the failure to timely report hundreds of transactions pursuant to an OFAC general license. Between 2011 and 2018, Amazon accepted and processed orders for shipments to persons in Crimea, Iran, and Syria, as well as to persons listed on OFAC’s Specially Designated Nationals and Blocked Persons (SDN) List, in apparent violation of OFAC sanctions programs. Through its website, Amazon also facilitated orders for individuals located in or employed by foreign missions of Cuba, North Korea, Sudan, and Syria. The total value of the goods involved in the apparent violations was approximately $269,000. These apparent violations occurred primarily due to the company’s automated sanctions screenings software, which did not properly analyze all relevant transaction and customer data and, as a result, did not flag transactions involving blocked persons and sanctioned jurisdictions.
Amazon’s case highlights the importance of ensuring the effectiveness of risk-based compliance controls, including sanctions screening measures appropriate for e-commerce and other internet-based businesses that operate on a global scale.
For more information on how these could impact your business, contact:
- Martin Lutz, Partner (email@example.com, 512-495-6024),
- Jamie Joiner, Special Counsel (firstname.lastname@example.org, 713-615-8530),
- Lindsey Roskopf, Attorney (email@example.com, 713-615-8534),
- Justin Cawley, Senior Counsel (firstname.lastname@example.org, 202-812-2644), or
- Another member of the McGinnis Lochridge International Trade and Transactions Practice Group